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Title: Confusopoly : a special case of the 'oligopoly problem' : implications for consumer and competition policy
Author: Siciliani, P.
Awarding Body: University College London (University of London)
Current Institution: University College London (University of London)
Date of Award: 2013
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The subject of this thesis is focused on the peculiar market failure dubbed confusopoly, a combination of confusion and oligopoly. Accordingly, confusopoly can be briefly described as a situation where a group of companies with similar products intentionally confuse customers instead of competing on price. Typical examples are utility services such as retail energy, communications and finance services. The thesis starts from the observation that it is very difficult to rectify this market failure either by means of demand-side consumer law or supply-side competition law interventions. This is ultimately related to the problem of identification that is at the core of the long-dated ‘oligopoly problem’, which substantially puts into question the effectiveness (and thus the proportionality) of any kind of public intervention aimed at restoring the competitive process. Nevertheless, it is hard to claim that the observed pattern of tariff proliferation across the market does constitute 'competition on the merits', given that the resulting increase in search costs is not only detrimental to consumers, but also to traders willing to compete fairly. This is because, under confusopoly, it becomes difficult to poach customers who have come to distrust service providers in general and have therefore entrenched low expectations in terms of the benefits of switching. Ultimately, the case for intervention boils down to a collective – that is to say, coordinated - restriction of the competitive process, carried out by frustrating consumers; who, being subject to cognitive overload, end up losing confidence in their collective ability to drive ‘competition on the merits’. Nevertheless, any intervention must be carefully designed in order to mitigate the risk of unintended consequences, specifically: of reducing the incentive to innovate through product and price differentiation; and of facilitating plain price coordination which would otherwise be difficult to sustain.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available